National All Schedules Prescription Electronic Reporting Reauthorization Act of 2010

I yield myself such time as I may consume.

(Mr. BOUSTANY asked and was given permission to revise and extend his remarks.)

I rise in opposition to H.R. 5297.

Madam Speaker, we have heard a lot today about the centerpiece of this bill--the highly controversial $30 billion small business lending fund, a provision sometimes referred to as TARP III. That provision is certainly of major concern to me, and it is reason enough to vote against this bill, though I want to focus my remarks on aspects of the bill that are within the Ways and Means Committee's jurisdiction.

This legislation includes approximately $12 billion in small business tax provisions, including a number of items that Republicans have long supported. For example, there is widespread, bipartisan support for expanded business expensing and for the extension of bonus depreciation as ways to encourage additional capital investments.

In addition, this bill includes a provision originally authored by our colleague from Texas (Mr. Sam Johnson) that would eliminate the outdated requirement that employees keep extensive records documenting their personal use of their employer-provided cell phones so they can include the value of that benefit in their incomes.

It also includes a provision that I have been working on with Chairman Lewis of the Oversight Subcommittee that would reduce penalties on small businesses that unintentionally violate certain disclosure rules under section 6707(a) of the Tax Code. Republicans don't object to these provisions. In fact, we think they should have been enacted months ago.

The tax portion of this bill also contains a highly troubling provision that would essentially double down on a particularly flawed element of the majority's new health care law. It is the requirement that small businesses file form 1099 with the IRS for every business and individual to which they make total payments of more than $600 each a year. We already know that this highly confusing and burdensome information-reporting regime, which could cause the number of required tax forms to quintuple, will drive up the cost for small businesses across the country. It is clear that this added expense will mean that employers will have less money to hire new workers and to retain existing ones.

Instead of working with Republicans to repeal these onerous new 1099 reporting requirements, the majority is now actually seeking in today's bill to substantially increase the penalties for failure to comply with them. Although proposals to increase the penalties for failure to file correct information returns have not always been particularly controversial, these penalties now apply to a much larger universe of transactions because of the majority's new health law. Because those new requirements are so confusing and burdensome, especially for small businesses that are already struggling to meet payroll, increasing the penalties for what could be inadvertent mistakes seems especially unfair.

To add insult to injury, the legislation before us would also expand the types of transactions subject to 1099 reporting requirements even further. The bill would generally require that a recipient of rental real estate income file an information return on his rental property's expense payment as well. For example, an individual who rents out even a single condo unit would generally be required to file a 1099 for his purchase from Home Depot or other corporate establishments if he buys more than $600 in supplies from them over the course of the year.

This new requirement, which would raise more than $2.5 billion over 10 years, could prove to be every bit as burdensome for owners of small rental real estate holdings as the health law's 1099 requirements are for small businesses, especially considering the increases in penalties I mentioned a moment ago.

But let me close by making a broader point. The majority boasts about how much this bill's tax provisions like increased expensing and extending bonus

depreciation will help small businesses--and let me be clear. Those are proposals that Republicans continue to support. But any tax benefits provided by this bill at the margins will pale in comparison to the enormous tax increase the majority has in store for every taxpaying small business at the end of this year.

By failing to extend the critical tax relief that is scheduled to expire at the end of 2010, the majority will impose a $3.8 trillion tax hike on American taxpayers--including every small business in America that pays income taxes--over the next 10 years. Especially with unemployment continuing to hover near 10 percent and economic growth very sluggish, that is a terrible idea for small businesses. It's a terrible idea for the economy, and it's a terrible idea for job creation.

Madam Speaker, I reserve the balance of my time.

Madam Speaker, I mentioned earlier the small business provisions that we do agree upon, but we think that these are going to be outweighed by the onerous 1099 provision that is in the health law, and the impact on businesses is going to be terrible.

I want to just mention something here. The IRS's own National Taxpayer Advocate highlighted several problems with this particular 1099 reporting requirement. ``The new reporting burden, particularly as it falls on small businesses, may turn out to be as disproportionate as compared with any resulting improvements in tax compliance. Small businesses may have to pay for additional accounting services, incurring additional costs. In our view, it's highly likely that the IRS will improperly assess penalties that it must abate later after great expenditure of the taxpayer and IRS time and effort. Small businesses that lack the capacity to track customer purchases may lose customers, leaving the economy with more large national vendors and less local competition.'' Those are the words of the National Taxpayer Advocate at the IRS.

This 1099 reporting burden on small businesses is particularly onerous and outweighs many of the advantages of some of these tax provisions that we all agree upon. It's a shame that we couldn't have gotten together to put together a better small business package that would actually promote small business growth, promote jobs, and promote our economy.

Madam Speaker, I reserve the balance of my time.

I yield myself the balance of my time.

Madam Speaker, I mentioned that we are for some of this tax relief in this bill. But if you talk to small business owners across this great country of ours, you talk to workers, you talk to families, what they're concerned about is the uncertainty, the uncertainty of what's happened over the last 2 years under this administration. This atmosphere of uncertainty is what's killing small business growth, and it's killing jobs.

Now, we highlighted the 1099 provision in the health care bill. That's just one provision in a massive bill that has led to this tremendous uncertainty, this atmosphere that is just like cold water on all business activity.

Yes, I admit the credit problems are real. Small businesses are struggling with it. But why is that? It's because there is uncertainty in the economic climate.

Now, it's nice. We have a bill that offers some good tax provisions in there. But where one hand giveth, the other hand taketh away with onerous provisions that are going to add costs to our businesses that are trying to hire and trying to make a living and trying to prosper, trying to create wealth and prosperity for American families.

The bottom line is we need good, solid policies that are going to basically eliminate this uncertainty. That's why I have to say I lament the fact that we couldn't get together and work on something that would really promote job growth, promote economic growth and prosperity for families. But, no, we have to play these political games, and we have to put provisions in there for certain reasons that actually are going to work counter to what we're trying to do.

The 1099 provision is just one of many, many elements that have led to this intense uncertainty across the board. I challenge my friends. I say go across the country, visit your districts, talk to small business owners and ask them what is the problem. They'll tell you it's credit. But they'll tell you, We don't know what's coming with this health care and what it's going to cost us.

There are a number of provisions the way this is going to be implemented, the 1099 provision being one. New taxes, the tax uncertainty--my God, that is a huge issue. Why can't we get together and extend the tax relief from 2001 and 2003 and keep the capital gains and dividend taxes where they are today? That will create an atmosphere of certainty for our businesses that want to hire, they want to produce goods, they want to export.

Why can't we articulate a coherent trade policy that's really going to promote exports? We've got three trade agreements on the table ready to go that immediately promote exports that will create high, good- paying jobs. One-out-of-five jobs in this country are related to trade. But, no, we won't take up those trade agreements. Ask why. Special interest. It's not what's best for America; it's for special interest.

We have a moratorium on drilling down in my district, in my State. It's killing small business growth. Killing it. These are small businesses that provide services and equipment and manufacturing to support American energy. And guess what. We have an arbitrarily imposed moratorium that defies any basis in fact or science at this stage, and we can't even get answers from this administration to bipartisan letters inquiring why that's the case.

So let's talk about how you get rid of uncertainty in this economic climate. We've got a climate of fear right now. People are fearing what's coming out of Washington.

What we need is certainty, and we need good, solid politics that are going to help American workers and American families.

I thank the chairman of the Ways and Means Committee, Mr. Levin, for yielding. Mr. Levin has been one of our hardest workers and leaders in the effort to make sure that American business can succeed and expand and create good-paying jobs for our economy.

I just heard the last of his remarks, but my presumption is he was saying, as we all know is the case, there is not a place that any of us travel in the United States of America, when we talk to small businesses all over this country, that they don't say: Congressman, one of the real problems I have is I can't get capital. I want to put an additional room on my restaurant so I can have some additional tables, and I'll have to hire some additional--maybe a cook and a waiter and waitresses and a receptionist, but I can't get capital. I know I can get the customers, but I can't expand.

That's what this bill is about. This bill is about empowering small businesses to do what they do so well.

In our work to recover from the worst economic crisis of our lifetimes as a result of the economic policies we put in place in the last administration, we're suffering under the worst economic crisis in 75 years. Only the Great Depression is analogous.

Businesses will play an extraordinarily important role in bringing us back; they are our economy's job-creating engine. Over the past year, 64 percent of new jobs came from small businesses. Keeping small businesses growing and creating jobs is essential to our economic recovery, and supporting small businesses is an essential part of rebuilding American industry, which is why this important small business lending bill is part of the Democrats' ``Make It in America'' agenda.

You're going to be hearing a lot about that agenda: ``Make It in America.''

There are an awful lot of people in our country right now who, understandably, are not sure they're going to make it in America. They're not sure their kids are going to be able to make it in America. They're not sure they're going to have a retirement on which they counted. ``Make It in America.''

Now, that has another meet meaning as well: make it in America; manufacture it in America; create good-paying jobs through manufacturing things in America that Americans will buy, and yes, the rest of the world will buy.

This is a plan to strengthen American manufacturing and its ability to create well-paying middle class jobs. Six Make It in America bills have already been signed into law. In addition,

Democrats have voted for investments in job-creating infrastructure projects, lower taxes for 98 percent of America, expanded Small Business Administration lending, a tax credit for small businesses that hire unemployed workers, and long-term tax credits to help small businesses afford employer health care. And we've done it in the face of a year and a half of near unanimous Republican opposition.

The challenges faced by small businesses are still, of course, significant ones. Last year, for instance, 45 percent of small businesses seeking loans to expand or even stay in business were turned down for a loan, which had an obvious impact on employment.

To expand the job-creating flow of credit, I urge each of my colleagues, not Republicans or Democrats but all of my colleagues, who all want to see small businesses grow, who all want to see jobs created, and, therefore, I urge all of my colleagues on either side of the aisle of whatever ideology, support this bill.

I talked to my small bankers last week. They say if they get this capital, they're going to lend to small businesses. I talked to my small businesses, and they say if this bill passes, they believe that they'll be able to get a loan to expand their business or to keep in business.

First, this bill creates a small business lending fund that makes it easier for small businesses to access the capital they need. It also establishes $12 billion in tax cuts for small business.

I've heard a lot of talk throughout my 30 years here in the Congress of the United States from the other side of the aisle about cutting taxes on small businesses. Well, this cuts $12 billion in taxes on small businesses. I would hope that you would feel that was consistent with what you said ought to be done. We agree. And we've done it. And we're trying to do it again.

These tax credits encourage small business investments by eliminating small business capital gains taxes in many cases; they encourage innovation by helping entrepreneurs deduct more startup expenses; they make it more affordable for business owners to invest in the equipment they need to expand; and, as I said, they make health care more affordable for the self-employed--all designed to grow and expand small businesses and to create jobs for the millions of Americans who have been hardworking Americans, lost their job, and they want to work and they're looking for work, and they can't find it. This is an opportunity for us to expand that job pool by an estimated 500,000.

In addition, this bill strengthens State and SBA programs that lend to small businesses. We have such a program in the State of Maryland. We think this will help. And it strengthens overseas competitiveness by funding export-promoting programs and by fighting for market access and a level playing field for American companies that compete abroad.

In all, this bill's provisions are projected, as I said, to save or create as many as a half million jobs.

Passing this bill is a test of every Member's commitment to the businesses that are the backbone of our districts. It is a measure of our support for their ability to innovate, grow, and employ more workers.

But as important as this bill is, it is not the end of our work to create small business jobs.

For instance, the House will soon debate Congressman Miller's bill to support lending for home construction--another example of Democratic efforts to support small businesses and create jobs.

I hope that every one of my colleagues sees fit to support this bill, not because it perfectly represents every view that you have--none of us vote for bills that reflect our views perfectly--but because the consensus of the business community is this will move us forward.

Vote for this bill. It's good for America. It's good for our people. It's good for jobs.

Madam Speaker, I ask unanimous consent that I substitute for the gentlewoman from Illinois on managing our 10 minutes.

Madam Speaker, I further ask unanimous consent that all Members have 5 legislative days within which to revise and extend their remarks and include extraneous material on this piece of legislation.

Madam Speaker, I yield myself 1 minute to say that this is a bill that passed the House in May; it was over in the Senate; it was subject to a filibuster; that filibuster was broken; and the Senate has sent us back the bill. It is not everything we wanted, but it is a significant improvement and will, I think, be helpful.

No one has alleged any possible negative consequences. Some have said it might not be as helpful as we believe, but we think it will enhance the lending capacity of small banks for small businesses.

I reserve the balance of my time.

I yield 3 minutes to one of the leading advocates and architects of this bill, the gentlewoman from Illinois (Ms. Bean).

I thank the gentlewoman for yielding.

I yield the gentlewoman 1 additional minute.

Yes, the gentlewoman is exactly correct. It is intended that this be treated as tier 1 capital in a way that is consistent with other capital securities issued to Treasury.

The gentlewoman is correct.

Madam Speaker, I yield 1 minute to the gentleman from Missouri (Mr. Cleaver).

I yield the gentleman 30 additional seconds.

Madam Speaker, let me inform my colleague that I intend to close with my remaining 4 minutes, and I'm my last speaker. I will close; so I reserve the last 4 minutes to close.

Madam Speaker, I yield myself the balance of my time.

First, this bill deals with the particular needs of minority women and veteran-owned small businesses. I want to point out that we have had hearings documenting the barriers and the discrimination that face small businesses that are owned by minority women or service-disabled veterans. There were hearings on this. There is evidence that they have a harder time and get less value for their loans. I want to make clear that we have looked at that, and our inclusion of provisions for that is based on our evidence.

Secondly, I have to say that my colleague from Texas is to be congratulated on his selectivity. He manages to do more partial quoting of people's positions than I get on my cell phone in a bad reception area.

For example, he talked about the Independent Community Bankers. You might have had a hard time, listening to the gentleman from Texas, figuring out that they wrote us a letter dated September 22. Maybe they changed their mind overnight and talked to the gentleman from Texas, but I am skeptical. In the letter they say this bill: ``. . . is a bold, fresh proposal that would provide another option for community banks to leverage capital and expand small business credit.''

The Independent Community Bankers, whom he sought to quote denigrating this bill, are very much in favor of this bill.

The National Association of Home Builders likes the concept, although they were upset with one of the things that the Senate left out.

The Financial Services Roundtable--and here is the problem when taking a partisan stance: You have to over-argue your case. If you listen to the gentleman from Texas, there are no small businesses anywhere that would like to get a loan but can't find it from their bank. Now no one, including the gentleman from Texas, believes that is true.

I have to say that my advice to my colleagues is, even in the heat of a political debate, try to refrain from saying something that no one will believe because it is not helpful to your argument.

Yes, there are cases where there are banks that have enough capital. There are cases where there are companies that are afraid to lend. But what the gentleman has said goes far beyond that: There are no significant number of small businesses in America that are encountering problems because there are banks that don't have enough capital. No one believes that.

Now here is the problem. We have people who do not want to see anything get better. The gentleman from Texas (Mr. Hensarling), I will credit him because he didn't talk much about this bill. He complained about a lot of other bills. I understand that. He, I think, quite honestly realized there was not a lot of bad things to say about this bill. The worst they can say about this bill is it might not be used as much as we think. I disagree. In this vast economy, $30 billion is not a huge amount of money from the standpoint of the small business borrowers.

Now, this bill is not what I would like it to be. The gentlewoman from New York (Ms. Velazquez), the chair of the Small Business Committee, improved this bill significantly in the House. And this is not as good a bill as it came back from the Senate as it was before. I am going to be working with her. I intend to vote for this bill to give the Senate another chance. I don't like to give up on people or institutions. I believe in redemption, and we will give the Senate a chance to get it right.

But let's be clear. The Independent Community Bankers are for this. Other small businesses are for this. The argument that no small business anywhere in America has capital that they need and can put to use and can't find a bank, that simply isn't valid.

On uncertainty, I understand the problem of uncertainty in taxation. You know what the uncertainty is? What's going to happen to the Bush tax cuts. And whose fault is that uncertainty? President Bush and his Republican allies, who passed a manipulative, book-cooking tax cut that they said would last 10 years. I didn't say that it should last for 10 years and then expire. I didn't say that the estate tax should be a dipsy-doodle that went up and down and up and around. That is what the Republicans did because they were trying to hide from the American people the full budgetary impact of their taxes.

Let's pass this bill, do what we can for small businesses, and go on to other work.

Independent Community

Bankers of America',

Washington, DC, September 22, 2010.

Hon. Nancy Pelosi,

Speaker of the House, House of Representatives, Washington,

I yield 2 minutes to the gentlewoman from Illinois (Mrs. Biggert).

It is my honor and privilege to yield 3 minutes to the gentleman from Texas, the ranking member of the Financial Institutions Subcommittee, Mr. Hensarling.

Madam Speaker, may I inquire as to how much time is remaining on both sides?

Madam Speaker, I yield myself such time as I may consume.

Just last month, in the month of August, I traveled around the 19th Congressional District. I had nine town hall meetings. But more importantly, I had numerous meetings with small businesses and with larger businesses in my district and with banks, both large and small, about this issue of getting America back to work and getting small businesses back to creating jobs again, and one of the things I heard over and over again was the word ``uncertainty.''

They said, Congressman, there is too much uncertainty about what the future looks like in this country.

I heard small businesses say, We don't know what this new health care plan is going to mean or cost to our business. Congressman, we don't know what the tax environment is going to be in this country because Congress hasn't done anything to keep the largest tax increase in the history of our country from unfolding. Congressman, we don't know how to deal with all these new regulations that are coming out of all of these agencies where EPA is trying to circumvent Congress and regulate greenhouses. And, Congressman, we don't know what to think about a country that keeps spending and borrowing and spending and borrowing to the point where now every day every dollar we spend we borrow 42 cents.

So I heard that from the businesses. And what I heard them say is, We are holding on to the employees we've got. We've tried not to lay off anybody. And we could probably buy some new machinery, or we could probably put some more people on, but there's too much uncertainty. We are just going to sit on the sidelines.

Also I heard, when we had the debate on this bill previously, the other side talking about the lack of credit availability to a lot of small businesses, and so I went to see my friends in the banking business. And I went to say to them, Why aren't you lending money? And they said, Congressman, we've got lots of money to loan. Our bank has the strongest capital it's had in a long time. We have money to lend. They said, The good customers that we would like to lend money to don't want to borrow money because of the uncertainty that's going on in this country right now.

I said, Well, let me make sure I understand this. You're saying you have the money to loan, but people don't want to borrow it because they are concerned about the future of this country and what the environment, business environment is going to be? And they said, That is exactly right.

And so what is so interesting about this is this is another one of the majority's failed attempts to recycle a program that didn't create any jobs the first round. TARP I, TARP II, all of the stimulus, all of these massive amounts of future generations' economic opportunity thrown at this economy and no jobs have been created. In fact, we have almost got 15 million people in this country that are unemployed today. And since we've done all these programs, we've lost almost 2\1/2\ million jobs.

What the small businesses need in this country is certainty and not another bailout program. This bill raises taxes. It gives some temporary tax relief, as my friend from Texas said, but it also--and I don't know what part of the fact that the small businesses are concerned about this 1099 thing, now we've got the 1099 in the health care bill. Now we've got the 1099 on rental expenses in this bill making it more onerous, creating more uncertainty, more lessening the opportunity and the motivation for small businesses to expand and to create jobs in this country.

In fact, yesterday Secretary Geithner appeared in one of our committees. He said banks have plenty of money to lend. That's Secretary Geithner. We had the Independent Community Bankers say that banks have plenty of liquidity, plenty of money to lend. It's a matter of getting quality demand back.

Another comment was from our folks at NFIB. They said that the primary problem facing small business owners right now in terms of job creation is not access to credit.

This is the group of people that represents small businesses in this country. It is a lack of sales, customers, and confidence. Small business owners are unlikely to invest in hiring or expanding their businesses when their sales and profits remain weak.

If the majority is serious, and we are wondering if they are serious, about getting America back working, getting America back to the vibrant economy that it had, let's do something serious about that and not put the American taxpayers--we are going to go borrow $30 billion for this. And we are going to have to borrow the whole $30 billion because somewhere in the middle of last month, everything the Treasury spends from that point going forward is borrowed money. We are headed to a $1.3 trillion deficit this year.

So we are going to go borrow $30 billion to put into a program that the banking industry and NFIB and all of these people say really isn't what the economy needs. What the economy needs is certainty: certainty in taxes, certainty in regulatory environment, and certainty that this Congress is going to quit borrowing and spending money that it doesn't have.

So I urge my colleagues to vote ``no'' on this bill. Let's vote for something that really matters and really gets America back to work.

I yield back the balance of my time.

Madam Speaker, pursuant to House Resolution 1640 and as the designee of the chairman of the Committee on Financial Services, I call up the bill (H.R. 5297) to create the Small Business Lending Fund Program to direct the Secretary of the Treasury to make capital investments in eligible institutions in order to increase the availability of credit for small businesses, to amend the Internal Revenue Code of 1986 to provide tax incentives for small business job creation, and for other purposes, with the Senate amendment thereto, and I have a motion at the desk.

Madam Speaker, I rise today in support of H.R. 5297 and urge my colleagues to support America's small businesses, our job creators, by voting ``yes'' on this bill.

Some Members of Congress frequently talk about the importance of small businesses to our communities and our economy, yet fail to actually vote for pro-business legislation that comes before them on this House floor. Today they have the chance to act, to do something that truly provides real and immediate assistance to small business owners.

The Small Business Jobs Act is one of the most important bills this year to support our economic recovery. During the small business Federal resource seminars that I hold in my district, community business owners have told me again and again that lack of access to affordable credit remains their greatest obstacle to business recovery, expansion and diversification.

This critical and timely bill will help bridge that gap. Today's legislation builds on the successful provisions in the Recovery Act that helped revive small business lending and secondary credit markets. This bill provides increased SBA loan guarantees and reduced fees; and $12 billion in small business tax cuts like the net operating loss carryback, enhanced section 179 expense provisions and bonus depreciation, and eliminates capital gains taxes for small business investments.

Also included is a provision I authored to allow commercial real estate refinancing in the SBA 504 program. This will help business owners with performing loans stay in their business properties that would otherwise be ineligible for refinancing due to falling values.

I would now like to ask the gentleman from Massachusetts to engage in a short colloquy to clarify the capital treatment of small business lending fund investments.

Over the last few months, hearings in the Financial Services Committee and many meetings that Members have had with constituents have clearly demonstrated that this kind of legislation is being called for by a broad spectrum of American small businesses and small lenders. One of the main components of the bill is the small business loan fund.

Up to $30 billion in capital to small banks can be leveraged to $300 billion in loans to small businesses, our job creators, by making money for the government over 10 years. Community banks that participate in the small business lending fund will be able to support many multiples of that amount in new lending. To allow that to occur, it has always been our intent and understanding that the bank regulators should treat small business lending fund investments in all eligible institutions-- community banks, thrifts and holding companies--as tier 1 capital, in a manner consistent with that accorded to other capital securities issued to Treasury by eligible institutions and in consideration of the strong public interest in promoting lending to small businesses.

It is my understanding that these investments are meant to be counted as tier 1 capital. Mr. Chairman, is that correct?

I yield to the chairman.

Mr. Chairman, it is also my understanding that you and committee staff have been in discussion with Treasury and regulators since this bill was in our committee about the intent that these investments can be counted as tier 1 capital in a manner consistent with that accorded to other capital securities issued to Treasury and that Treasury and the regulators understand Congress' intent and have noted that they have the appropriate authority to do so under the bill.

Thank you, Chairman Frank, for all your hard work on this important bill. With access to tier 1 capital, community banks that participate in this program will be able to provide small businesses with the credit they need to grow and hire.